You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. When should you raise the admission price in order to increase revenue?

Question

Social Studies

Corinne

17 November, 09:40

You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. When should you raise the admission price in order to increase revenue?

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Answers (2)

Know the Answer?

Kylie Lucero · Answer 1

If demand is elastic an increase or decrease in price of admission will decrease or increase the number of admission respectively and in turn can change the revenue of the museum and that change will depend on the elasticity. If the demand is inelastic there will be an increase in price which will lead to an increase in the revenue of the museum.

Ryann Hatfield · Answer 2

The correct answer is: When the price ticket demand is inelastic.

Explanation:

Inelasticity is a characteristic of goods that do not change in quantity demanded in front of changes in prices. It is calculated by diving the percentage change in quantity demanded by the percentage change in price. If the result is greater or equal to 1, the product is elastic. If the result is lower than 1, the product is inelastic.

Thus, if a museum curator intends to increase revenue by increase admission tickets price, the curator must make sure that the demand for the price tickets is inelastic.